07-14-2012, 06:05 AM
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It's 42
Industry Role:
Join Date: Jun 2010
Location: Global
Posts: 18,083
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IRS (USA) The earnings from a 529 are not taxable but the money invested is in after tax funds. There may be some state plans available to you or other tax angles where you live.
I think two year college funding in technical, vocational or applied sciences should be taxpayer supported or subsidised. The better educated a workforce is the more competitive it will be in high value production.
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Why use a 529 plan? There are advantages of 529 plans and one may be suitable for your family’s needs. Earnings are not subject to federal tax when used for eligible college expenses. Earnings are often not subject to state tax. States may offer other incentives to in-state participants. There are no income restrictions on individual contributors. Contributions are only limited by the qualified education expenses of the beneficiary. You can change the beneficiary of a plan if the new beneficiary is in the same family. You can open a plan benefiting anyone: a relative, a friend or even yourself. The plan owner or custodian controls the funds until withdrawal, not the beneficiary.
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